Financial Assistance to Industry

Ben Spencer Excerpts

Monday 23rd March 2026 General Committees

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

It is a pleasure to serve under your chairmanship, Sir Alec. His Majesty’s Opposition welcome this motion, which will allow the Secretary of State to make individual payments above £30 million to successful applicants to the life sciences large investment portfolio.

The LSLIP has been developed and designed to support large-scale manufacturing and R&D investments in medicine, medtech and diagnostics, with a total budget of up to £570 million, and scope for individual awards of up to £130 million per project. It very much builds on the life sciences innovative manufacturing fund set up by the last Conservative Government to provide substantial capital grants for manufacturing innovation to strengthen the UK’s health supply chain. Together, the life sciences large investment portfolio and the life sciences innovative manufacturing fund provide a pipeline of support in the UK for both resilience-building manufacturing and global-scale industrial capability.

The year 2025 was a challenging one for the UK life sciences sector, with AstraZeneca first scrapping plans to invest £450 million in expanding a vaccine manufacturing plant in Merseyside, blaming a reduction in Government support, and then announcing in September that it was pausing its £200 million research investment in Cambridge. That same month, Merck announced that it was scrapping a planned £1 billion expansion of its UK operations. However, that was not the full extent of the problems, with Eli Lilly and Sanofi also pausing investment in their UK operations.

Several life sciences investments secured under the previous Conversative Administration were culled or put on hold after this Government took office. The life sciences large investment portfolio may go some way to recovering that lost ground and signalling to the life sciences sector that the UK remains serious about attracting, retaining and growing a world-leading life sciences R&D and manufacturing sector. Sadly, it will not be sufficient in isolation.

The Government intervened late last year to stabilise the rebate rate applied to newer medicines under the voluntary scheme for branded medicines pricing, access and growth for 2026. However, UK rates remain significantly higher and more volatile than those in many of our peer countries, which is a deterrent to significant investment in UK life science industries. My first question therefore is, what further action are the Government taking to secure longer-term stability and predictability in this area?

Last year, the Association of the British Pharmaceutical Industry made a pre-Budget submission calling on the Government to take action to restore the UK’s position as a global leader in life sciences. Among the ABPI’s recommendations was ensuring that VAT is not applied to free-of-charge medicines under early-access schemes, to preserve access for UK patients and maintain the UK’s attractiveness for clinical trials. However, The Sunday Times reported yesterday that one multinational drug company has stopped patients receiving early-access medicines, with another considering similar action after His Majesty’s Revenue and Customs issued VAT bills to pharma companies providing medicines under the scheme.

That fiscal folly has real-world effects on not only the economy, but the lives of patients with debilitating and life-threatening conditions who are taking part in those trials. Therefore, my second question to the Minister is, what discussions has he had with Treasury colleagues about the urgent need to reform the tax system to make the UK a more attractive and stable jurisdiction for investment in life sciences?

--- Later in debate ---

[Dr Spencer]

Will the Minister respond on the point about VAT on medicines and trials?

[Kanishka Narayan]

I am happy to look into the specific case study in the papers, which the hon. Gentleman referenced. I have to say that I have not seen the mention in The Times of the company he talked about, and I am reluctant to speculate on the context. However, if he is looking for an answer, I am happy to write to him about that case.

These investments will make a significant contribution to UK economic growth and outcomes for NHS patients. The life sciences large investment portfolio is a key tool that will support the Government’s missions to kick-start economic growth and build an NHS fit for the future. Working together with industry, the Government are delivering better patient outcomes and driving economic growth, and I look forward to continuing that work and building on that momentum. I commend the motion to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the motion, That this House authorises the Secretary of State to make payments, by way of financial assistance under section 8 of the Industrial Development Act 1982, in excess of £30 million to any successful applicant to the Life Sciences Large Investment Portfolio, launched on 15 November 2025, up to a cumulative total of £570 million.